Economics Unit 1.3

Public goods

p

Products or services provided by the government sector for societal use and benefit.

Private goods

A product or service provided by the business sector for use and consumption by the business sector.

Markets

A market is any place (physical or digital) where consumers can interact with businesses for exchange.

Law of Demand

As price increases, quantity demanded decreases

Externality

When a decision between different parties affects parties who weren’t involved in the decision.

Merit good

When a good/service has net positive externalities associated with it.

Demerit good

When a good/service has net negative externalities associated with it.

Propensity to Consume

Consumers willingness and ability to spend money

Demand

The quantity of a commodity that will be purchased in a market over a given period of time at a given price.

Determinants of Demand

Factors that change how willing/able consumers are to demand

Propensity to Supply

How willing and able to supply a business is.

Supply

The quantity of a commodity that will be provided in a market over a given period of time.

Law of Supply

The proposition that the quantity supplied of a good or service varies positively with the price of the good or service. As price increases, quantity supplied increases.

Determinants of Supply

Factors that change how willing / able businesses are to supply.